Big media is afraid to try to take down Google's ubiquitous video hosting site

FileSonic, UK-based Earnwell Ltd.'s file-sharing service, is afraid -- very afraid. In the wake of the Megaupload takedown/arrests, FileSonic is making some major changes to its service, changes that disable sharing.

I. Fearful FileSonic Terminates Sharing

Before the changes FileSonic functioned almost identically to Megaupload. Customers could enroll for free, but in FileSonic's case it was only a 30-day trial. For those 30 days they could upload 10 GB, but saw their content throttled. Customers could opt to enroll for $9/month, which would remove the throttling and allow customers to upload unlimited files 5 GB or smaller.

Like Megaupload, FileSonic claims to have a "zero tolerance" policy when it comes to violations of the U.S. Digital Millennium Copyright Act, which forbids sites from participating in copyright infringement by hosting openly accessible copyrighted works. It says it uses Vobile's vCloud9 software to scan uploaded files, including compressed files, to detect infringement.

But in the wake of the Megaupload mess, FileSonic apparently decided that it would simply have to cut sharing of files altogether, as it was apparently afraid that vCloud9 was not a strong enough protection. The problem is, of course, lots of users share files for purposes other than infringement.

The site announced its decision via a banner, which states, "All sharing functionality on FileSonic is now disabled. Our service can only be used to upload and retrieve files that you have uploaded personally."

We predict some cancelled subscriptions in the near future.

II. Fileserve Also Sounds Death Knell

In related news Fileserve -- another Megaupload competitor -- has begun to make major changes, which some say could be an indication that the company is preparing to pull the plug altogether. One of the key complaints against Megaupload in the Grand Jury criminal court filing was that the service paid users to share in order to profit off of advertisements, a scheme they liken to infringement for ad profits.

Fileserve ran an almost identical service (which paid $25 per 1,000 downloads), but it has since closed this "affiliate program", scouring all traces of it off its homepage.

Users are also reporting that their accounts were removed. When they tried to log in, they were greeted with a warning that their account had violated the Terms of Service, hence the deletion. But customers say that the site appears to be deleting all customers who were in the affiliate program, not just the few who may have abused it.

Amid mass outrage, Fileserve looks ready to collapse. Outraged customers/affiliates are claiming in forums posts that the service "is a scam", thanks to Fileserve' unfulfilled promises of payment, and that the site "is finished."

As the site and its administrators are U.S. based, according to IP lookups some users took things a step further, even writing an admin that they were "Coming to kick your ass!"

III. YouTube is Magically Immune to Infringement Worries

It appears that there's much fear in the wake of the Megaupload takedown -- and perhaps for good reason. While big media may be unrealistic in its expectation of converting infringers into filesharers, this is at least a major moral victory for rich movie studios and record labels, as file-hosting sites remaining a major source of piracy, behind the more traditional peer-to-peer networks and torrents.

This atmosphere of fear, uncertainty, and disinformation (FUD) is unfortunate, though, as it prevents legitimate sharing.

A handful of sites, such as RapidShare, are holding out, but it would not be surprising to see them collapse in coming months, either out of fearful admins or from Megaupload-like arrests.

The elephant in the room in all of this is YouTube. Google Inc.'s (GOOG) YouTube is used by hundreds of millions of Americans, but it is also one of the biggest sources of shared infringed content online.

Despite anti-infringement warnings, similar to Megaupload, Fileserve, and FileSonic's, virtually any song you can imagine is available on YouTube, most of which were not posted by the copyright holder.

For example, let's say we want to listen to Young Jeezy's "Welcome Back", but it isn't available on the authorized Vevo channel, or else the Vevo version has censored profanity. We simply search "Welcome Back", and lo and behold page after page of infringed song is available for our listening pleasure.

The same goes for sporting events, TV clips, and more. This content can easily be downloaded for offline viewing/listening via an array of browser extensions.

YouTube even has a pay-for-play affiliates program, similar to Megaupload's and Fileserve's.

Of course like these file-sharing sites YouTube hosts a vast array of legitimate content as well. But it is hard to argue the fact that YouTube is getting favored child status, allowed to commit the same offenses that others are imprisoned for. It's reasonably clear why this is -- the government (and big media) are afraid of the public outcry that would occur if they took down YouTube. Plus big media has tried to take down YouTube before -- and failed.

But this policy of unequal enforcement smacks of Mafioso techniques. The small and the weak are shaken down, while the strong are allowed to do what they please. One must wonder how long such an inherently unequal and corrupt system will be able to sustain itself, before something will snap (perhaps a takedown of YouTube) and the public reacts strongly, as they did with SOPA.

"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs